Sunday, February 03, 2008

Unit 2: Costs and benefits associated with opening the Alaskan wilderness to development

The Guardian reports that the US government has announced plans to open more than 3m acres (about 5,000 square miles) of Alaskan wilderness to logging, mining and road building

http://www.guardian.co.uk/environment/2008/jan/29/conservation.environment

As an economist I would hope that the US government conducted a CBA before deciding to open up the region, but I have my doubts

a) List the private costs and benefits and the external costs and benefits of developing the region
b) Given that the decision has been taken to open up the region, what do you think the outcome of such a CBA might be?
c) Why might the government not have followed the outcome of the CBA when coming to this decision?

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